* Brazil Bovespa falls 1.99 pct, Mexico IPC down 1.26 pct
MEXICO CITY Jan 23 Commodities producers drove
Brazil's benchmark Bovespa stock index down on Thursday
following weak manufacturing data from top trade partner China
and a critical assessment of Brazil's economic policy from top
bond fund manager Pimco.
Mexico's IPC index sunk the most since the first week
of this year, while Chile's bourse lost 0.73 percent.
Pacific Investment Management Co, as Pimco is formally
known, expressed concern about Brazil's deteriorating public
finances, citing loose fiscal policy, the excessive role of
subsidized credit and tightening monetary policy.
"With the volatility currently being experienced by emerging
markets as the Federal Reserve tapers, and ahead of October
Brazilian presidential elections, the scaling of Brazil
investments among non-dedicated emerging markets investors
should be moderated," wrote Michael A. Gomez, co-head of Pimco's
emerging markets portfolio management team in an investor note
Brazil's Bovespa index fell nearly 16 percent last
year, and is already down more than 6 percent in 2014, as
investors lose confidence about local economic growth.
Pimco's report contributed to further losses in Brazil's
Bovespa on Thursday, which started the day lower after data
showed activity in China's factory sector contracted in January
for the first time in six months.
China is the No. 1 purchaser of Brazilian commodities
exports such as iron-ore and soybeans, and changes in the
outlook for Chinese economic growth tend to have a strong impact
on some of the Bovespa's most heavily-weighted shares.
The Bovespa posted its biggest one-day loss in two weeks,
closing 1.99 percent lower at 48,320.64 points.
Iron-ore mining giant Vale SA, which counts China
as its biggest customer, dropped 2.63 percent while state-run
oil company Petroleo Brasileiro SA, known as
Petrobras, fell 2.34 percent.
Shares of homebuilder Brookfield Incorporacoes SA
soared 18.92 percent amid market chatter that the company could
be taken private, traders said. In a securities filing after
market close, the company said it "has no knowledge of any fact
that could justify (the stock's) oscillations."
Mexico's IPC index also fell on the China data,
Broadcaster Televisa, down 3.01 percent, drove
losses in the index, while telecoms giant America Movil
, which is controlled by Mexican billionaire Carlos
Slim, fell 0.96 percent after Barclays cut its target price on
Chile's IPSA index lost 0.73 percent. Shipbuilder
Vapores fell 12.12 percent after the company said on
Wednesday it had reached a non-binding agreement with Germany's
Hapag-Lloyd to join forces.